The smartphone wars have evolved from fighting for marketspace to battling over who stole whose IP in their phone designs. Now Microsoft‘s allying with HTC…while slightly dissing Android. Is the real target Apple?

The smartphone wars have evolved from fighting for marketspace to battling over who stole whose IP in their phone designs. Now Microsoft‘s allying with HTC…while slightly dissing Android. Is the real target Apple?

“Microsoft Corp. and HTC Corp. have signed a patent agreement that provides broad coverage under Microsoft’s patent portfolio for HTC’s mobile phones running the Android mobile platform,” explains Microsoft’s press release. “Under the terms of the agreement, Microsoft will receive royalties from HTC.” While this apparently cements a “long-standing” business relationship, HTC has all but admitted that some elements of its Android smartphone repertoire step on patented IP owned by Microsoft, and rather than engage in messy legal battles on the matter, HTC has merely agreed to push a few dollars to MS for every Android phone it sells. MS’s deputy general legal counsel, Horacio Gutierrez tells CNet: “Competitors do not free ride on our innovations.” The deal covers all Android phones made by HTC, including Google’s own-branded Nexus One. The implication is that MS is aggressively protecting its IP use, and may even go after other manufacturers who make Android phones.

Apple, of course is also suing HTC for similar patent infringement–it, and MS, aren’t targeting Google because while Google puts together the Android OS itself, it’s the implementation on touchscreen smartphones by HTC that infringes on their IP.

So is the real target of the MS agreement with HTC actually Apple? By avoiding a complex legal battle and instead quickly settling on a licensing agreement, MS and HTC have effectively formed a smartphone IP bloc. This supports further development of Android phones, as well as facilitating the entry of Microsoft’s revamped Windows Phone 7 Series smartphones later in the year. And by slightly strengthening Android’s position in the market, MS is helping challenge the absolute market dominance by the iPhone, which of course is good for its smartphone business too. As other evidence mounts that Android is beginning to chip away at the iPhone’s lead, the HTC-MS deal could be seen as the further hints that the iPhone’s dominance is showing a few cracks.

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